Consumer Demand Trends and Issues in Quality and Safety

Transcription

1 Consumer Demand Trends and Issues in Quality and Safety DR. ROBERTA COOK Dept. of Ag and Resource Economics University of California, Davis for UCD Postharvest Technology Short Course June 20, 2014 Updated April 2015

2 Fresh Produce Consumption Trends

3 Fresh-cut, Organic and Total Fresh Fruit and Vegetable Sales in Key US Food Retailers, % Change 2014 vs 2013 Weekly $ sales/store Weekly quantity sold/store Freshcut Fruit** All 12.0 FruitVeg* Fresh Cut Veg Salads Organic Fruit *Excludes other produce (such as salad dressings, toppings, etc.), which is 10% of produce dept sales dollars and 5% of quantity. ** Excludes overwrap. Organic Veg 17.2 Source: FreshFacts on Retail, Whole and Fresh Cut Produce Trends: 2014, United Fresh Produce Association and Nielsen, March Fresh Coverage Area (FCA) incl key retailers from food, mass/supercenter and club chains, or more than 18,000 stores. It includes UPC, random weight and retailer assigned codes.

4 Consumer Behavior Higher income and socially conscious foodies are driving demand; their preferences lean to organic, convenience (fresh-cut), flavor, local. The former slide shows that fresh-cut and organics grew whilst quantity (physical volume) sold of the rest of the items in the produce dept declined (since overall quantity sold was stagnant despite the growth in fresh-cut and organics). For mainstream consumers, positive attitudes about wellness benefits of fresh produce not translating into purchases. Improved flavor might help. Perception that produce costs more and may be wasted. Better shelf-life might help million people on food stamps (SNAP) in FY2014 (vs 17.3 in 2000) for cost of $73.9B.

5 Consumer Behavior Nielsen Perishables Group scanner data show that total volume/quantity sold in the produce department is up 11.8% comparing 2013 vs (2.8% CAGR). Dollar sales grew nearly 25% in the same time period. Changing product mix toward higher value items (e.g., organics, fresh-cut, specialty), more store formats selling fresh produce, and higher prices account for much of the growth.

6 Top 10 Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs Product Weekly $ Sales per Store Percent Change vs Weekly Vol. per Store Percent Change vs Avg Retail Price Percent Change vs Packaged Salad $3, , $ Tomatoes $2, , $ Potatoes $2, , $ Cooking Vegs $1, , $ Onions $1, , $ Peppers $1, $ Lettuce $1, $ Carrots $ $ Mushrooms $ $ Cucumbers $ $ Source: FreshFacts on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

7 Product Top 10 Fruit Sales and Pricing in Select US Food Retailers, 2013 vs Weekly $ Sales per Store Percent Change vs Weekly Vol. per Store Percent Change vs Avg Retail Price Percent Change vs Berries $3, , $ Apples $3, , $ Bananas $2, , $ Grapes $2, , $ Citrus $2, , $ Melons $1, , $ Avocados $1, , $ Stone Fruit $ $ Cherries $ $ Specialty $ $ Source: FreshFacts on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

8 Forces Stimulating Fresh Produce Consumption More forces are in play to educate consumers about the benefits of fresh produce (MyPlate, salad bars in schools, PBH, govt and private efforts to increase awareness of the health benefits of fruits and veg, etc). Culinary Institute of America and Harvard School of Public Health Dept of Nutrition Initiative: Menus of Change, The Business of Healthy, Sustainable, Delicious Food Choices. This is designed to introduce more fresh produce on foodservice menus. Stealth health trend in foodservice.

9 Distribution of U.S. Households by Income Level, Share of Total Fresh Produce Expenditures/Income Level & Ave. Fresh Produce Expenditures/Income Level, 2012 $819 31% $100, % <$15,000 15% $254 8% Source: Calculations by Roberta Cook from the Food Institute s Demographics of Consumer Food Spending, $ = Average fresh produce expenditures per income group $594 18% $478 14% $70,000- $99,999 14% $50,000- $69,999 14% Share of Households $30,000- $49,999 20% $15,000- $29,999 18% $409 17% $339 13% % = Percent of total fresh produce expenditures contributed by each income group

10 Factors affecting demand for fresh produce Commodity price, consumer income, prices of substitutes and complements, population growth rates, ethnicity, culture Quality: appearance, flavor, color, shape and size; more breeder emphasis on flavor Info on produce selection, ripening, recipes Convenience in prep, usage and consumption; packaging role Shelf-life, postharvest technology Consistent availability, year-round supply

11 Important factors when shopping for fruit/veg, 2014 Freshness Cost Percent of primary shoppers Taste 55 Healthy 31 Family Preferences 21 Convenient to use 17 Locally grown Seasonality Country of origin A specific brand Other Source: Primary Shoppers Attitudes and Beliefs Related to Fruit and Vegetable Consumption, 2012 vs Produce for Better Health Foundation

12 Per Capita Consumption of Fruits and Vegetables, All Product Forms Changes in total consumption mask significant changes in: product form product mix diversity within product segments

13 U.S. Per Capita Vegetable Utilization/Consumption, Excluding Melons, P, (all channels, foodservice and retail, includes freshcut), pounds Pounds per capita Processed includes frozen, dried and canned. Processed includes frozen, dried and canned. Fresh includes fresh-cut and bulk. Fresh includes fresh-cut and bulk P Processed Veg, Excl. Potatoes Processed Potatoes Fresh Potatoes Fresh Veg, Excl Melon and Potato Sources: USDA/ERS, Vegetables and Melons Situation and Outlook Yearbook, May 30, 2014 through 2007; and for USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, Figures compiled by Dr. Roberta Cook, UC Davis, fresh and processed sweet potato share of total sweet potatoes is estimated; processed vegetables includes lentils and dry peas, and excludes dry beans.

14 US Per Capita Consumption of Select Fresh Vegetables, P (includes fresh-cut and bulk, all marketing channels - foodservice and retail) 15 Pounds per capita P=Preliminary Carrots Bell pepper Broccoli Sweet corn Cucumber Source: USDA/ERS, Vegetables and Pulses Yearbook March 2015.

15 U.S. Per Capita Utilization/Consumption of Lbs. Per Capita Lettuce, by Type, P (includes fresh-cut and bulk, foodservice and retail) Head Lettuce Leaf Romaine P Source: USDA/ERS, Vegetables and Pulses Yearbook May 30, 2014 and unpublished ERS data for leaf and romaine. All

16 US Per Capita Utilization/Consumption of Fresh Tomatoes ( P ) Pounds per capita P=Preliminary Source: USDA/ERS, Vegetables and Pulses Yearbook Tables, posted online March 20, 2015,

17 US Fresh Tomato Retail Market Shares (in Lbs) by Key Type, 2013: Story of Market Transformation [CATEGORY NAME] [VALUE]* [CATEGORY NAME] [VALUE] GH 9% [CATEGORY NAME] [VALUE] Roma 27% *Mainly mature green Vine Ripe 12% Grape 14% TOV 22% Source: FreshLook Marketing

18 Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Vegetables Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, Perishability Cost Seasonality Location grown Use of pesticides Appearance Preparation time needed Family won't eat them Unpredictable taste Genetic modification Fear of food safety outbreak Health-related diet Do not know how to prepare Negative media attention 0% 10% 20% 30% 40% 50% 60% More Fresh Veg Same or Less Fresh Veg

19 Pounds per capita US Per Capita Total Fruit Disappearance/Consumption, Including Melons, Pounds , (all channels, foodservice and retail) Process Citrus Process Noncitrus Fresh includes fresh-cut and commodity. Source: Fruit and Tree Nuts Yearbook, ERS/USDA, October 31, Fresh Citrus Fresh Noncitrus, Incl Melon 1999 (frozen, dried and canned)

20 U.S. Per Capita Consumption of Selected Fresh Fruit (all have positive health messages, and all but kiwis have generic promotion*) Pounds per capita Blueberries Strawberries Kiwifruit Avocados Source: Fruit and Tree Nuts Yearbook, ERS/USDA, October 31, 2014 *Kiwis slashed generic promotion in the late 90 s and were unable to sustain growth and capitalize on a positive health message.

21 US Per Capita Consumption/Utilization of Selected Fresh Fruit , (all channels, foodservice and retail) pounds per capita Orange Grape Banana Apple Source: Fruit and Tree Nuts Yearbook, ERS/USDA,

22 US Per Capita Disappearance/Consumption of Melons, (watermelons have generic promotion) Pounds per capita Watermelon Honeydew Cantaloupe Others Source: Fruit and Tree Nuts Yearbook, ERS/USDA,

23 US Per Capita Consumption/Disappearance of Selected Fresh Fruit pounds per capita Mango Papaya Pear Pineapple Peach/Nect. Source: Fruit and Tree Nuts Yearbook, ERS/USDA,

24 Why Retailers Love Berry Consumers? They Spend Money Very High 150+ High LIFESTYLE Affluent Modest Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume Start-up Families % HHs with young children only <6 Small Scale Families % Small HHs with older children 6+ Younger Bustling Families % Large HHs with children (6+), HOH <40 Older Bustling Families % Larger HHs with children (6+), HOH 40+ Young Transitionals % Any size HHs, no children, <35 Independent Singles % 1 person HHs, no children, Senior Singles % 1 person HHs, no children, 65+ Established Couples % 2+ person HHs, no children, Empty Nest Couples % 2+ person HHs, no children, Senior Couples % 2+ person HHs, no children, 65+ Low 1-50 Total Percent Volume 20.80% 49.60% 17.20% 3.10% 8.00% 1.20% Source: Perishables Group FreshFacts Powered by Nielsen.

25 Plant Varieties and Flavor

26 Plant Varieties and Flavor

27 Plant Varieties and Flavor

28 Demographic Trends

29 Projected US Population Hispanic 16% Black 13% Asian 5% Other 2% Hispanic 23% Black 13% Asian 7% Other 2% Non- Hisp. Whites 66% Non-Hisp. Whites 57% million million Source:

30 Foodservice contributes to the evolution of food trends and ethnicity leads the way, Authentic and Fusion, benefiting fresh produce Brazilian Churrascaria Peruvian Argentine Oaxacan Fine Dining Chefs Creation Casual Theme Interpretation Szechwan Thai Vietnamese Indonesian Taiwanese Family Dining Interpretation QSR Interpretation Non-Commercial Interpretation Cambodian Incorporated into Consumer Meal Mix

31 Average Annual Household Fresh Produce $Expenditures in Food Stores, by Ethnicity, 2012 Fresh Fruit Fresh Vegetables All White and Other Asian Black Hispanic Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

32 Age and Generation Terms Matures = born before 1946 Baby Boomers = born Gen X = born Gen Y = born Millenials = teenagers and 20s Source: Lancaster and Stillman, When Generations Collide, 2002

33 Distribution of U.S. Households by Age Group and Fresh Produce $Expenditures in Food Stores, % $700 25% 20% 15% 10% 5% 0% $290 4% 7% $445 $540 19% 17% 15% 16% $577 23% 20% $492 $502 18% 18% 12% 12% $388 8% 10% $600 $500 $400 $300 $200 $100 $0 Share of Household by Age Group Percent Fresh Produce Expend by Age Fresh Expenditures by Age, $ Source: The Food Institute, Demographics of Consumer Food Spending, 2014.

34 When shoppers plan for dinner (percent of shoppers) All Shoppers Gen Y Gen X Boomers Matures No plan 2 hours before dinner Weekend Weekday Not sure if eating in or out 2 hours before dinner Weekend Weekday Source: US Grocery Shopper Trends 2011, FMI

35 Changing Attitudes

36 Over the past decade, consumers have been redefining quality across virtually every food and beverage category Yesterday Today Emerging Scientific Processed Industrial Organic, natural Fresh / less processed Local, personal Engineered For personal health Real, authentic For personal wellness For community health Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

37 Source: Hartman Salt, June 30, 2011 VEGETARIANS WITH BENEFITS Ethical Eater A person who only or mostly eats food that meets certain ethical guidelines, particularly organically grown food and humanely raised meat, poultry and fish. Flexitarian A person who eats a mostly vegetarian diet, but who is also willing to eat meat or fish occasionally. Nutritarian A person who chooses foods based on his or her micronutrient content. Pescetarian A person who supplements a vegetarian diet with fish.

38 VEGETARIANS WITH BENEFITS Rawist A person who eats only unprocessed, unheated and uncooked food, especially organic fruits, nuts, vegetables and grains. Vegangelical An extremely zealous vegan who is eager to make other people believe in and convert to veganism. Vegivore A person who craves or has a special fondness for vegetables. VB6 From the saying, "vegan before 6," a person who eats a vegan diet before 6:00 PM, and then whatever he or she wants after that. Source: Hartman Salt, June 30, 2011

39 U.S. Consumers Rank Key Factors Affecting Their Produce Purchase Decisions, Fall 2009 v. Fall Fall 2009 Fall 2008 On a scale of 1-5 with 5 being most important. Source: Lutz, Brand Performance and Produce, Produce Business, Jan

40 Sustainability Trend from the Consumer Vantage Point Hartman Research Results Most consumers have very limited understanding or usage of the concept of sustainability In general, food terms as used by the food industry are not understood: functional foods, IPM, food miles Sustainability is becoming an umbrella term for health, wellness, organics, environmental consciousness, fair trade, simple living, buying local, etc. Personal sustainability linked to environmental sustainability for some

41 Hartman Organizes the World of US Organic Consumers, % don t purchase organics CORE MID-LEVEL PERIPHERY 18% 46.5% Source: Beyond Organic & Natural report, The Hartman Group, Inc. February %

42 Index of US Organic Fresh Produce Consumption by Spectra Lifestyle/Behavior Stage, 2010, All Channels Very High 150+ LIFESTYLE Affluent Modest Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % Volume Start-up Families % HHs with young children only <6 Small Scale Families % Small HHs with older children 6+ Younger Bustling Families % Large HHs with children (6+), HOH <40 Older Bustling Families % Larger HHs with children (6+), HOH 40+ Young Transitionals % Any size HHs, no children, <35 Independent Singles % 1 person HHs, no children, Senior Singles % 1 person HHs, no children, 65+ Established Couples % 2+ person HHs, no children, Empty Nest Couples % 2+ person HHs, no children, Senior Couples % 2+ person HHs, no children, 65+ High Total Percent Volume 15.3% 22.7% 17.8% 11.2% 16.0% 17.1% Source: Spectra BehaviorScape: Total Consumption/Spectra 2010 Jan/Homescan Product Library

43 US Consumer Reasons for Buying Organic Fresh Produce, 2011 Avoidence of 61% chemicals Personal health Better taste Environmental/Social responsibility Nutrient content 49% 48% 44% 40% Other 15% Source: Fresh Trends 2011, Vance Publishing

44 Organic Users*: Reasons for Not Using More Organics Too expensive 69% Can't tell if really organic Only recently began purchasing organic Not readily available Don't really believe they're more nutritious Don't really believe they're safer Can't find brand(s) we like Don't want to change from products we use Don't stay fresh as long as nonorganics 23% 20% 20% 11% 8% 7% 7% 6% *Limited organic buyers (Primary HH shoppers who have purchased organic, but fewer than 4 product categories, in past 3 months) (n=537) Often do not look appealing Certification requirements increasingly weak 6% 6% Source: Organics 2008 Report, Hartman Group

45 US Consumer Reasons for Buying Local Produce Freshness Better taste In season Price Confidence in food safety Support for local community Enviro-friendly Connection to farmers NA= not available Organically grown NA NA NA 96% 94% 93% 89% 89% 88% 87% 87% 80% 84% 69% 79% 50% 59% 46% Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, 2011.

46 Reasons for Buying Locally Grown at Retail, 2014 Freshness 86% Support local economy 75% Taste Like knowing source/how produced 61% 56% Nutritional value Price Enviro impact of long distance transportation Appearance Long term personal health effects 39% 39% 31% 30% 24% Source: FMI U.S. Grocery Shopper Trends 2014

47 Definition of Locally Grown Products according to Shoppers, 2011 Source: US Grocery Shopper Trends 2011, FMI. other 2% grown on familyowned farm 13% grown in my state 44% grown within certain mile radius 41%

48 Maximum Distance a Food Item Can Travel from Source to Store to Be Called Local Source: US Grocery Shopper Trends 2011, FMI miles 26% More than 100 miles 13% miles 7% 25 miles or less 26% miles 28%

49 Food Safety Attitudes

50 How confident are you that the food in your supermarket is safe? 84% 66% 89% 83% Completely or mostly confident '97 '99 '02 '04 '06 '08 ' Source: FMI US Grocery Shopper Trends, various years

51 Specific Areas of the Store and Supply Chain: I trust the products sold there are safe Strongly Somewhat Somewhat Strongly Agree Agree Disagree Disagree Fresh produce 58% 38% 3% 1% Over-counter meds. 58% 34% 2% 1% Grocery stores 54% 39% 5% 1% Fresh meat, poultry & fish 53% 41% 3% 1% Prepared meals 41% 45% 6% 7% Pet food 37% 24% 4% 2% Source: US Grocery Shopper Trends 2011, FMI, 1,026 shoppers

52 Which food-related items constitute a serious health risk (according to US shoppers)? 2011 Bacteria or germs 50% Residues from pesticides 40% Product tampering 39% Declining since 1992 Terrorist tampering 36% Food from China 28% Antibiotics/hormones in livestock 27% Eating food past "use by" date 23% Irradiated Foods 21% Foods produced by biotechnology 17% Source: US Grocery Shopper Trends 2011, FMI.

53 100% US Consumer Confidence in the Safety of Fresh Produce by Source, % 80% 70% 60% 50% 40% 30% Not confident at all Mostly not confident Neutral Mostly confident 20% 10% Very confident 0% Farmers' Market Supermarket Mass Retailer Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

54 2010: How comfortable are you that food grown/produced outside the U.S. is safe? Very, 5% Somewhat, 44% Not at All, 16% Not Very, 34% Source: U.S. Grocery Shopper Trends 2010, FMI.

55 Changes in consumer use of information technology influences marketing tactics and communication vehicles The fresh produce industry needs to find creative ways to communicate with consumers via cyber channels and social networks with the aim of being relevant: Value messaging Cater to health and wellness Create convenient and quality eating experiences Celebrate cooking, preparation, social eating experiences, indulgence

56 Conclusions: Need for Shopper-Centrism Flavor is where it s at! Creative marketing and merchandising that communicates a product s benefits to consumers Reaching consumers in multichannels and utilizing mobile technology can stimulate purchases

57 Conclusions Unmet potential for fresh produce demand expansion in foodservice channels, potentially convenience stores, dollar stores and pharmacies Consumption gains in some items are at the expense of others, we need to understand more about the role of substitutes and complements Firms need to better understand diverse consumer segments and their needs at the individual produce item level Consumer research is exploding due to the internet Social media is making it much more cost-effective and feasible to conduct micro marketing

58 Conclusions Continuing reduction in the unemployment rate will help demand Changing public policy, industry-govt. partnerships like PBH, trade association and firm-level efforts may gain traction and change consumer behavior not just attitudes; time will tell Tell your story, retailers will increasingly support you To be healthy it must be safe, invest in food safety, don t risk relinquishing this positioning! Consumer expectations growing for industry accountability, making traceability, sustainability, social responsibility and food safety standards are ever more important

59 Supplemental Information

60 Shoppers concern about nutritional content and evaluation of diet 80% 60% 40% diet could be healthier % very concerned about nutritional content 0% '96 '98 '00 '03 '05 '07 '09 '11 Source: FMI Trends in the US Consumer Attitudes and the Supermarket, various years

61 How often do shoppers use a store s nutrition label guidance to determine which item to purchase? Always 7% Frequently 34% Never 7% Rarely 20% Occasionally 32% Source: US Grocery Shopper Trends 2011, FMI

62 Adoption of Social Media by Gender: Percent of Shoppers Using Various Social Networks All Shoppers Men Women Facebook YouTube LinkedIn Twitter MySpace Blogs None Source: US Grocery Shopper Trends 2011, FMI

63 Adoption of Social Media by Marital Status: Percent of Shoppers Using Various Social Networks All Shoppers Married Single Facebook YouTube LinkedIn Twitter MySpace Blogs None Source: US Grocery Shopper Trends 2011, FMI

64 Adoption of Social Media by Generation: Percent of Shoppers Using Various Social Networks All Shoppers Millennials Gen X Boomers Matures Facebook YouTube LinkedIn Twitter MySpace Blogs None Source: US Grocery Shopper Trends 2011, FMI

65 Activities shoppers would undertake based on social networking recommendations Try new restaurant 77% Make new recipe 70% Purchase new food 62% Shop at new grocery store 56% Source: US Grocery Shopper Trends 2011, FMI

66 Tools to help US shoppers learn more about food must be offered in various formats All Shoppers Millennials Matures Percent of Shoppers Who Use 1. online/mobile recipes paper recipes recipes with sales specials how to videos cooking classes online wine tips in-store wine classes Source: US Grocery Shopper Trends 2011, FMI

67 US Consumer Sustainability Efforts, 2011 Sustainability is a macro trend that will continue to do well in the future but within limits. Green products must still be functional, affordable and measure up to their conventional counterparts. Organic fresh produce a gateway category. Behaviors requiring little sacrifice (reusing plastic grocery bags, recycling, reusable bags) will likely see continued growth. Recycling plastic rose from 62% in 2008 to 75% of shoppers in Paper recycling jumped from 63% to 74% of shoppers. Can recycling moved from 70% to 78% of shoppers. Source: US Grocery Shopper Trends 2011, FMI

68 US Shoppers with stronger environmental tendencies are: Women 66% Generation X, especially female X71% High-income shoppers 72% High produce consumers Warehouse club store shoppers 72% Organic/specialty store shoppers 83% Highly concerned about nutrition 73% Highly concerned about food safety 72% Avid circular readers 73% Source: US Grocery Shopper Trends 2011, FMI

69 Meal Preparation in US Households, 2011 In households with two or more people: Woman does all the cooking: 70% Shared responsibility: 23% Someone else does all the cooking: 6%. Shopper eating habits: Home-cooked dinners: 5 days/week Eating out: 1 day/week Takeout/ordering in/drive through: 1 day/week. Shopper knowledge about preparing fresh produce: Very knowledgeable: 44% I manage, but I m no expert: 44% I need help: 9%. Source: US Grocery Shopper Trends 2011, FMI

70 Factors Associated with the Choice to Eat In or Dine Out, 2008 vs Percent of Shoppers Difference Cooking Dinner Time Price Healthfulness Eat Out Time Price Healthfulness Source: US Grocery Shopper Trends 2011, FMI. Survey of 2,048 shoppers.

71 Level of comfort with foods from various sources (percent of shoppers) broken down by gender and generation Source Very comfortable Somewhat comfortable Total Total Men Total Women Total Millennial Total Mature United States Canada Western Europe Latin and South America India China Source: US Grocery Shopper Trends 2011, FMI

72 Who should be responsible for ensuring that food is safe? Myself as an individual 58% 51% 55% Manufacturers / Processors Government institutions Food stores Consumer groups Farmers 9% 10% 12% 10% 10% 8% 35% 29% 33% 28% 27% 32% 28% 29% 25% Source: US Grocery Shopper Trends 2011, FMI

73 Where shoppers believe most food safety problems are likely to occur (percent of shoppers surveyed) Food processing & manufacturing plants Restaurants Distribution centers Home On the farm During transportation Grocery stores Not sure Source: US Grocery Shopper Trends 2011, FMI

74 Index of US Conventional Fresh Produce Consumption by Spectra Lifestyle/ Behavior Stage, All Channels Very High 150+ High LIFESTYLE Affluent Modest Cosmopolitan Suburban Comfortable Struggling Working Plain Rural Behavior / Stage Centers Spreads Country Urban Cores Towns Living Total % $ Start-up Families % HHs with young children only <6 Small Scale Families % Small HHs with older children 6+ Younger Bustling Families % Large HHs with children (6+), HOH <40 Older Bustling Families % Larger HHs with children (6+), HOH 40+ Young Transitionals % Any size HHs, no children, <35 Independent Singles % 1 person HHs, no children, Senior Singles % 1 person HHs, no children, 65+ Established Couples % 2+ person HHs, no children, Empty Nest Couples % 2+ person HHs, no children, Senior Couples % 2+ person HHs, no children, 65+ Total Percent Total $ 33.6% 37.3% 7.6% 16.0% 5.2%.4% Source: Spectra BehaviorScape: Total Consumption/Spectra 2007

75 Top 10 Organic Fruit Sales and Pricing in Select US Food Retailers, 2013 vs 2012 Organic Product Weekly $ Sales per Store Percent Change vs Weekly Vol. per Store Percent Change vs Avg Retail Price Percent Change vs Berries $ $ Apples $ $ Bananas $ $ Citrus $ $ Grapes $ $ Avocados $ $ Stone Fruits $ $ Specialty Fruits $ $ Pears $ $ Value-Added Fruit $ $ Source: FreshFacts on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

76 Top 10 Organic Vegetable Sales and Pricing in Select US Food Retailers, 2013 vs Organic Product Weekly $ Sales per Store Percent Change vs Weekly Vol. per Store Percent Change vs Avg Retail Price Percent Change vs Packaged Salad $ $ Carrots $ $ Cooking Greens $ $ Lettuce $ $ Tomatoes $ $ Onions $ $ Cooking Veg $ $ Celery $ $ Potatoes $ $ Value-Added Veg $ $ Source: FreshFacts on Retail, Trends 2013, Perishables Group and United Fresh Foundation.

77 Private Label Sales of Key Fresh Produce Categories in US Supermarkets: Private Label Share of Total Category Sales, (52 week year-ending Sept. 25, 2010) Prepared Fruit 48.2% Citrus 34.2% Potatoes Pack. Salads Carrots 20.5% 19.5% 16.3% Millions Apples Lettuce Mushrooms Prepared Veg 9.8% 7.6% 7.5% 6.2% Note: Private label fresh produce sales are 10.4% of total fresh produce sales vs. 6.8% in In 2010 private label produce sales were $3.1B in stores tracked by Nielsen. Source: United Fresh Foundation Fresh Facts, 2011

78 Frequency of Purchase of Private Label Fresh Produce, 2011, (of the 67% of US consumers purchasing private label fresh produce) 16% 30% 3% 20% 30% < 25% of the time 25-49% of the time 50-74% of the time 75-99% of the time 100% Source: Fresh Trends 2011, Vance Publishing

79 Rating Private Brand Products at the Primary Store, 2011 Excellent 1% 36% Good 7% 56% Fair Poor Source: U.S. Grocery Shopper Trends 2011, FMI.

80 Reasons US Consumers Purchase Branded Fresh Produce, 2011 Consistency 57% Promotions Coupons 46% 44% Trust 31% Other Packaging 6% 8% Source: Fresh Trends 2011, Vance Publishing

81 USA Online Coupon Usage Grows More than 55.7 million Americans use online coupons, compared to 49 million in 2010, 25% of the population. Within the first six months of 2012, 28.1 million Americans have not used a Sunday newspaper as a source of couponing. Those who print coupons off the Internet have an average household income of $96,900, 20% more than the average household income. Digital coupon users make 23% more shopping trips and spend 50% more annually compared to the average shopper. Source: Coupons.com

82 Importance of Local Fresh Produce to Very important Fairly Important Neutral Fairly Unimportant Not at all important Consumers 21% 27% 21% 15% 17% 48% 38% 35% 73% 29% 39% 19% 22% 5% 6% 4% 4% % Source: PMA/Hartman, Identifying Consumer Trends in the Produce Category, 2011.

83 Importance of Local Fresh Produce at Restaurants Not at all important Fairly Unimportant Neutral 22% 16% 33% 55% 32% 47% Fairly Important Very important 33% 44% 7% 5% 5% 4% Source: PMA/Hartman, Identifying Consumer Trends in the Produce Category, 2011.

84 Farmers Markets at Hospitals

85 Kaiser Permanente Farmers Market Program 49 markets nationally, started in As a result of coming to the market: 76% report having increased their intake of fruits & veg. 71% report consuming at least a few more kinds of fruits and veg. Working with Sysco to distribute local produce to their hospitals

86 Comparison of Purchase Barriers Among Consumers that Report Buying More vs. the Same/Less Fresh Fruit Source: Identifying Consumer Trends in the Produce Category, PMA/Hartman, Perishability Cost Seasonality Location grown Use of pesticides Appearance Preparation time needed Family won't eat them Unpredictable taste Genetic modification Fear of food safety outbreak Health-related diet restrictions Do not know how to prepare Negative media attention 0% 10% 20% 30% 40% 50% 60% More Fresh Fruit Same or Less Fresh Fruit

87 Why US consumers buy fresh vegetables, among those who report buying more vs. those who are not, % 20% 40% 60% 80% Eating healthier Source of vitamins, minerals More Fresh Vegetables Freshness Cooking at home more Low in calories Convenient snacks Same or Less Fresh Vegetables Reduce risk of disease Reduce food expense Tastes good Eating less meat Eating less processsed food Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

88 Older Generations Are More Concerned with Eating Fresh Foods Describes me well Describes me somewhat Doesn't describe me Doesn't Describe Me 7% 10% 10% 9% Silent Gen. Baby Boomers Gen X Gen Y 46% 45% Describes Me Somewhat 26% 46% 51% 52% 9% Source: The Hartman Group, Acumen, 2013 Describes Me Well 45% 38% 39% 67%

89 Policies that US shoppers say they want from their produce providers, % 10% 20% 30% 40% 50% 60% 70% 80% Food safety Less pesticides used Only legal workers Fair trade practices Worker saftey programs Support for local community Reduced pollution Eco-friendly packaging Energy conservation Water conservation Smaller carbon footprint Worker benefits Organic growing techniques Public education programs Race and cultural diversity Alternative energy All Shoppers Farmers' Market Shoppers Source: The Hartman Group and PMA, Identifying Consumer Trends in the Produce Category, 2010.

90 Distinctions Consumers Make between Organic and Natural Meaning of Organic Meaning of Natural No pesticides No herbicides No growth hormones No artificial ingredients No antibiotics No GMOs Source: The Hartman Group, % 60% 59% 56% 55% 54% 46% 45% 49% 56% 45% 46%

91 In the past 12 months, have you stopped purchasing any food product because of safety concerns? Percent Yes All Shoppers 9% 38% 26% 31% 14% 12% Source: US Grocery Shopper Trends 2011, FMI.

92 2006 to 2011: What food products did you stop purchasing in response to food safety concerns? Percent Yes Peanut Products Beef / Poultry Seafood Fruit / Veg Net Spinach Lettuce Bagged Salad Tomatoes Other Source: FMI US Grocery Shopper Trends =Not available

93 US Consumers Primary Concerns about FFV Safety: Overall concerns mentioned by anyone; and concerns of consumers who reported not being confident v. those confident or unsure about the safety of produce, 2011 Grower handling / sanitation 23% 22% 30% Routine pesticide use 19% 19% 27% Possible food safety outbreaks 13% 10% 13% ot knowing if food bought is subject of outbreak 3% 9% 10% Overall Eating fresh produce raw 8% 6% 9% Time require to find outbreak source 8% 8% Not Confident Not knowing who grew the produce No concerns about produce safety Source: PMA/Hartman, Identifying Consumer Trends in the Produce Category, % 5% 5% 8% 9% 13% 14% Confident or Unsure